Gym fraudsters out of jail

January 25 2013 at 10:16am

INLSAPeter Gardener

Caryn Dolley

THE two former heads of the Health & Racquet franchise, who were at the centre of one of South Africa’s biggest white-collar crime court cases, have been released from prison after serving only a fraction of their sentences.

While behind bars Peter Gardener and Rodney Mitchell set up a fully sponsored, state-of-the-art gym in the Malmesbury Medium A Correctional Centre, which could be a blueprint for gyms in prisons around the country.

Gardener and Mitchell were found guilty in the Western Cape High Court in 2007 of fraud involving R12 million. Gardener was sentenced to 12 years with four years suspended, and Mitchell to 12 years with five years suspended.

They were the joint chief executives of LeisureNet, which operated the Health & Racquet gym franchise.

The group ran into financial difficulties and was liquidated in 2000. At then-President Nelson Mandela’s request the franchise was taken over by the Virgin Group the same year.

Rodney MitchellINLSA

In a 2002 judgment, the Western Cape High Court described the failure of LeisureNet as “the largest corporate collapse in South African history”.

In March 2011 Gardener and Mitchell were sentenced to seven years’ imprisonment after appealing against their original sentences. Gardener and Mitchell were arrested in 2002 but started their seven-year jail terms only in April 2011.

Yesterday Sabelo Mzanywa, area commissioner of the Correctional Services’ West Coast management area, confirmed to the Cape Times that they had been released in December.

This means they spent roughly 19 months behind bars.

Mzanywa said the two had applied for an early release and were now serving an alternative sentence.

In April, President Jacob Zuma announced remissions of sentences for some categories of prisoners.

Gardener and Mitchell, sentenced for non-violent crimes, had benefited from this when applying for an early release.

Mzanywa said part of their alternative sentence included community service. They had to return to the prison gym – opened a month before their release – every Wednesday to assist inmates.

Mzanywa said equipment for the gym had been sponsored by the companies Fitness World and Zone Fitness.

Of Mitchell and Gardener’s time in prison he said: “It takes a great man to say: ‘I’m here… now let’s do this’.”

Earlier this week their attorney, Jeremy Tyfield, told the Cape Times said he would take instructions from his clients to see if they would authorise him to respond to questions.

On Wednesday he said: “I hold no instructions to furnish any information to you.”

In April 2007 Mitchell and Gardener were convicted of fraud involving R12m, which arose from a stake in German gymnasiums that LeisureNet had bought in 1999.

Gardener and Mitchell’s interest in these gymnasiums had not been disclosed to the board.